Opening to benefit supply side reform

China's latest easing of its rules for foreign investment, a move toward a more open market policy, will bring in heated competition, but will not put too much pressure on local manufacturers, industry insiders said.

The State Council said on Tuesday it will temporarily allow foreign manufacturers to establish wholly owned companies in several key industries, including motorcycles, batteries, steel and high-speed train facilities and equipment in China's free-trade zones in Shanghai, Tianjin, Guangdong and Fujian.

"It will promote healthy competition, and benefit supply-side structural reform," said Zhao Zhongxiu, vice-president of the University of International Business and Economics.